Saturday, July 9, 2011

Co-mingling with Disaster

In a discussion elsewhere concerning what to do about the debt "problem" of the United States, and Social Security and other entitlement programs more specifically, someone replied with a whiney response straight out of Atlas Shrugged:

"The Congress stole our Social Security funds -- they like co-mingled, and removed and placed in that alleged lock box that never existed I.O.U.'S -- so, why should Social Security be targeted when it is the victim of all the greed! ..."

There is no "our Social Security funds". The entire system was a scam from the beginning, and the people who voted for it believed they could rob Peter to pay Paul and get something for nothing. Should they not bear the consequences?

If you want to fully understand this, read the section of Atlas that deals with the demise of the 20th Century Motor Company:

"...None of us knew just how the plan would work, but every one of us thought that the next fellow knew it. And if anybody had doubts, he felt guilty and kept his mouth shut--because they made it sound like anyone who'd oppose the plan was a child killer at heart and less than a human being.
"Evil-plain, naked, smirking evil, isn't it? Well, that's what we saw and helped to make--and I think we're damned, every one of us, and maybe we'll never be forgiven...
"Try pouring water into a tank where there's a pipe at the bottom draining it out faster than you pour it, and each bucket you bring breaks that pipe an inch wider, and the harder you work the more is demanded of you, and you stand slinging buckets forty hours a week, then forty-eight, then fifty-six--for your neighbor's supper--for his wife's operation--for his child's measles--for his mother's wheel chair--for his uncle's shirt--for his nephew's schooling--for the baby next door--for the baby to be born--for anyone anywhere around you--it's theirs to receive, from diapers to dentures--and yours to work, from sunup to sundown, month after month, year after year, with nothing to show for it but your sweat, with nothing in sight for you but their pleasure, for the whole of your life, without rest, without hope, without end.... From each according to his ability, to each according to his need...
"Love of our brothers? That's when we learned to hate our brothers for the first time in our lives.
"At first, I kept wondering how it could be possible that the educated, the cultured, the famous men of the world could make a mistake of this size and preach, as righteousness, this sort of abomination--when five minutes of thought should have told them what would happen if somebody tried to practice what they preached. Now I know that they didn't do it by any kind of mistake. Mistakes of this size are never made innocently.
"If men fall for some vicious piece of insanity, when they have no way to make it work and no possible reason to explain their choice--it's because they have a reason that they do not wish to tell...
"Well, we got what we asked for. By the time we saw what it was that we'd asked for, it was too late. We were trapped, with no place to go.
"By that time, a village half-wit could see what generations of professors had pretended not to notice. ...If this is what it did in a single small town where we all knew one another, do you care to think what it would do on a world scale?"

The solution is simply: close down Social Security and Medicare, not reform it. Don't try to finesse the problem. Simply shut it down cold turkey and write it off as a loss. Cut everyone's taxes and say -- you're on your own. If you're old, use your own savings, get your kids to help you, or find charity.

That's it. Problem solved.

Either that, or we all face the full consequences.

Let me paint the scope of how those consequences would play out, since no one seems to really want to look that deep:

If the U.S. Government fails to deal with entitlements, we will see a complete economic collapse of this country of a kind never seen before. Hyperinflation of a thousand percent -- per day. Complete destruction of all savings, all wealth. All businesses will cease to exist. The government will try to seize control of the businesses and order everyone to work under penalty of imprisonment, but they aren't capable of operating a lemonade stand much less a large company. All production of food, fuel and every other commodity will cease.

Just cease.

No one will be able to get anywhere, do anything, or find anything to eat. Rioting, looting and general anarchy will result, with mass starvation and killing that pits everyone against anyone who has anything at all of material value. There will emerge demands for order by any means, and the rise of a fully totalitarian government as they attempt to get control of the situation. But it will be difficult to get the Army or police to control it if we can't pay or feed them.

The anarchy will spread rapidly around the world after the first collapse and swallow everyone else. World war will be almost a dead certainty in the near term (let's say 5 years at most) as the stabilizing effect of U.S. military power disappears and countries like China and Russia and Iran and others all jockey for power. Hundreds of millions may be dead when it's over. Internally, there will be likely attempts to balkanize the United States into separate countries--with factions seizing control of the West, the Midwest, the South, and other regions, but once started, it will quickly become more fragmented than this and there will be thousands of sects popping up all over, thousands of no man's lands where no outsider dares to go.

All these new states will span the gamut of fascist, communist and religious dictatorships and frequent battles will take place between them. The one production capacity that will be maintained is the one to make guns, bullets and bombs. Subsequent wars and chaos over the next century on this continent and everywhere else will likely lead to centuries of a planet that is totally despotic with progressively declining standard of living. This could lead to a new Dark Ages lasting a thousand years.

All this is possible and much of it is a certainty unless people face facts today. As long as politicians and everyone else continue to believe money grows on trees and they are entitled to loot their neighbors and to rationalize Grandpa and Grandma's need for Social Security and other benefits (even though Grandpa and Grandma bear much of the guilt for the problem because they voted themselves bread and circuses decades ago) we are headed for annihilation as a country, a world, a civilization.

I say it's much easier to tell Grandpa and Grandma: sorry! You lost your investment, game over! Now you have to bear responsibility for it. Just shut down Social Security, cut everyone's taxes, and let individuals figure out what to do to ensure their own survival, or that of their parents.

As the economy rebounds explosively from removing the shackles of the entitlement programs, I suspect it won't be too hard for people to figure out how to survive. In fact, I bet it works itself out in about a year. But the key is to simply declare Social Security a loss, right now, and remember John Galt's words:

"Get the hell out of my way."

Postscript: In response to a good op-ed ("What’s Missing From The Budget Debate") over at the Forbes.com blog for Objectivism, writers Brook and Watkins make the point that everyone's talking about Ayn Rand without employing her arguments for the morality of capitalism, and I couldn't resist adding a comment related to my preceding post:

Ayn Rand's arguments for the moral case against entitlements are essential. What we face today is primarily a conflict of moralities: the morality of altruism, which holds not merely that we are our brother's keeper, but that we are his serf -- versus the morality of rational people who have a right to live and pursue their own happiness unencumbered by unchosen duties imposed on us by others. As she said in Atlas Shrugged,

"Do you know how it worked, that plan, and what it did to people? Try pouring water into a tank where there's a pipe at the bottom draining it out faster than you pour it, and each bucket you bring breaks that pipe an inch wider, and the harder you work the more is demanded of you, and you stand slinging buckets forty hours a week, then forty-eight, then fifty-six--for your neighbor's supper--for his wife's operation--for his child's measles--for his mother's wheel chair --for his uncle's shirt--for his nephew's schooling--for the baby next door--for the baby to be born--for anyone anywhere around you-- it's theirs to receive, from diapers to dentures--and yours to work, from sunup to sundown, month after month, year after year, with nothing to show for it but your sweat, with nothing in sight for you but their pleasure, for the whole of your life, without rest, without hope, without end.... From each according to his ability, to each according to his need...."

But Ayn Rand also argued that when your principles are correct, the moral and the practical are in harmony. I think another argument can be made and must be made if the American people are to wake up to reality--present them the cold, stark logic of what will happen if the entitlements aren't ended and the status quo continues.

Who is talking these days of the fact that we will experience a collapse right out of Atlas Shrugged--or Stalinist Russia? A collapse of such magnitude that it will very quickly lead to the destruction of every business in America.

But as fast as the economy is going to collapse, it likely won't collapse fast enough to offset the printing of monopoly money by the treasury, as government tries to answer the screams of those who feel entitled, along with those of every federal, state and local payroll.

Whateever nom de plume it's floated under, QE3, 4, 5, ad infinitum are a certainty as government tries to stay ahead of the game. In a race to the bottom, confidence in the dollar will fall faster than economic output will wither, giving rise to a hyper-inflation that will dwarf anything the Argentinians could imagine--it could reach hundreds or thousands of percent per day, as it did in Weimar Germany in the 1920's.

As money becomes worthless and people realize there's no work and no food to be had anywhere, complete anarchy will seize the country, with nationwide rioting and looting, mass killings and widespread starvation. Gold will be of limited value--when there's nothing to buy at any price, there's no need for money--but the government will seize all privately owned gold anyway, along with every other surviving asset.

Without food or money to pay the Army and police, there will be a temporary collapse of the government, which will re-emerge under martial law as people scream for order. Little known Executive Orders on the books for decades will be invoked by the President to seize every major industry and conscript the entire populace into work gangs. Congress will become irrelevant, and the government will quickly spiral into complete totalitarianism.

Many people will rebel and vastly more killings will take place in the civil wars that will break out, leaving millions dead. Millions.

Without adequate surviving transportation, the country will likely balkanize into competing regions, states, tribes, gangs that will span the gamut of fascism, stalinism, religious theocracies and medieval feifdoms.

And so will go the world: without the stabilizing influence of the U.S., a world war will likely occur in the midst of this, with countries everywhere seeing the opportunity to seize their neighbor's assets or settle old grudges. The U.S. will get involved, and send conscripts overseas to die, while conscripts die domestically, too--from fighting, starvation, ill health.

These are not just possible scenarios, they are certain ones--if politicians in Washington continue to talk of "political reality" and attempt to "fine-tune" the problem to satisfy the special interest groups they've created who we can be sure will continue to demand entitlements from their brothers.

But political reality has never trumped reality. As Ayn Rand said, "You can avoid reality, but you cannot avoid the consequences of avoiding reality."

The stark, practical reality people need to be made aware of is that we are facing the utter destruction of our way of life, our country, our world, our civilization--in our lifetimes.
There will be no entitlements after that happens. There will be no "getting yours" before the music stops. The music will just stop, leaving everyone standing--young and old, entitled and serfs alike.

The alternative? End the entitlements, now. Shut down Social Security, Medicare and Medicaid--cold turkey. Declare it a total loss. End all taxes for the entitlements.

The result? People would scramble for a few weeks, retirees would have to dip into their savings, depend on their children, approach charitable organizations for help--or get a job.

But it wouldn't last long.

The cancellation of all that debt -- tens of trillions of dollars, with interest -- with the sudden influx of so much money back into private hands -- hundreds of billions of dollars -- would give people so much confidence that the economy would explode in mere weeks with business growth and job creation.

And if you want to give it a real boost--cut $500B of regulatory agencies and suspend income taxes for a year.

That's the practical side of the argument. Because most people want to "do the right thing", the moral argument is always more fundamental--we have a right to our lives and to live them without shackles--but the practical argument might at least scare the hell out of enough people to make them demand our government do the right thing.

1 comment:

Chilling account but entirely possible. But the entire Left and most Conservatives will fight to the death to defend the entitlement state. At root, I think because their ethical theory is at stake. In the big picture, mankind is just not willing to give up altruism yet. It may require the collapse of modern civilization, the death of billions and suffering through another dark age before humanity is willing to junk self-sacrifice.

Sadly, it is our generation of humanity that may witness the beginning of the end. That is a thought which places clouds over even my brightest day.

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